Travel and hospitality are among the fastest-growing CX services sectors in 2023, with the market recovering to pre-pandemic levels. However, while vendors and clients are trying to adapt to the increased demand, they face higher costs, changing customer requirements, and more IROPs.

In February, Conduent was awarded a CX services contract by Virgin Atlantic to manage rebookings and provide customer support, including flight changes and cancellations. I spoke with Conduent to discuss the recent win, their sector-specific services, and the market evolution.

Pedigree in travel

Conduent’s longest-tenured CX services client is a U.S. multinational full-service airline it has supported since 2005. During the pandemic, Conduent reorganized and scaled down the operation for the client to accommodate the demand drop, but since 2022 has been ramping up the support structure again to handle the increased volumes. Conduent also supports a vehicle rental company, cruise lines, and hotel chains. Outside of pure CXS, it has transportation business worth $750m annually (FY 2022 revenues), which includes managed services and technology for road tolls and charging, curbside management, passenger payment, ticketing, boarding, and travel safety solutions.

Conduent’s CX services include different types of passenger support and customer care, technical support, sales, retention, collections, and specialized LOBs such as lost luggage management and upselling and cross-selling of ancillary services. For example, Conduent launched a white glove service for a cruise line for the premium customer segment with delivery from Guatemala.

Strategic domain offerings

Conduent’s travel and hospitality CX services are built on three foundations: standardization of operations, employee development, and addressing seasonal fluctuations.

The first foundation is standardization of operations, CX technology, and operational models across the multishore delivery network. With many travel clients expanding through M&A, the requirement to standardize disparate processes such as WFM, technology environments, and results is a high priority.

For example, for a cruise company in 2013, Conduent consolidated its nine locations into three in the U.S., LATAM, and Europe. It then unified the multilingual CX for 12 markets in nine languages. It regionalized the support structure to facilitate client communications and enable full visibility of newly outsourced guest services. Conduent also leveraged CX analytics to track agent productivity and customer activity across channels. The vendor also took additional LOBs, including sales and loyalty, to improve bookings, upselling, and cross-selling. Since the program started, Conduent has achieved 34% savings with $1m annual efficiency gains and has increased CSAT by 3%.

The second foundation is employee training, development, and engagement. Conduent’s Customer Experience Management practice has ~37k employees, including ~20k in WAH; the company’s talent recruitment, onboarding, learning, engagement, and retention best practices are key to attracting travel brands. For example, Conduent cross-shares its talent management know-how with a hospitality chain for its captive and third-party suppliers. This model of a collaborative outsourcing partnership is becoming standard.

During the pandemic, travel clients wanted to maximize WAH and looked to Conduent to offer rollout experience and tools such as gamification and especially security. For example, for an international brand of full-service hotels and resorts, Conduent built a CX services team of ~700 agents within two months. It streamlined the training curriculum to enable agent ramp-up and augmented the timelines with flex trainers. It also implemented WAH capability management and scheduling to complement the client’s four locations. As a result, Conduent reduced agent onboarding time from one week to two days, the customer curriculum reduced training from three weeks to 11 days, hiring SLA improved from 45 to 30 days, while quality scores in learning exceeded the target. Conduent teams also surpassed the client’s sales conversion performance for agents with the same tenure.

The third foundation is the ability to address seasonal fluctuations, with travel and hospitality clients struggling to maintain their CX resources throughout the year. Conduent uses its contracyclical clients in insurance, tax, healthcare, and the public sector to allocate travel support agents to other programs during the low season. When demand returns, it can ramp up 3x or 4x times. This flexibility eliminates the reduction following volume fluctuations, shortens the lead time for new agents, and reduces recruitment costs. It also improves eSAT through better work variability, with Conduent measuring 90% positive agent feedback across travel projects. An example of scaling for the current demand surge is for its longstanding airline client: Conduent grew from 50 voice agents to ~800,  and in 2021 it recruited and trained ~1k chat agents.

Bringing full BPS capability to the travel sector

Conduent accepts operational optimizations and knowledge sharing with travel accounts as part of the larger client relationship. Sharing training expertise for improved proficiency in the client’s delivery ecosystem and customer insights leading to reduced customer pain points in the overall travel product can be the basis for winning additional business in other areas such as F&A, procurement, HR services, and automated document management. For its flagship airline client, Conduent delivers HR services such as workforce admin, payroll, health & welfare admin, and other back-office services, with the deployment of employee self-service and full automation of HR processes.

Next on the CX services development roadmap, Conduent sees new requirements from U.S. travel clients for regional and multilingual support overseas. The company plans expansions in Europe and APAC, for example, in Conduent’s center in Kuala Lumpur, which offers multilingual support in Mandarin, Japanese, Korean, and Thai. The company is also exploring using a gig work model with a partnership platform to address the peripheral demand in the travel sector.

The company expects travel brands to take advantage of CX transformation levers more broadly, such as conversational AI for call avoidance. These investments are the sector’s response to growing cost pressures and higher cost of capital. Analytics is another investment area in travel, to gather insights into opportunities for operational improvements. An example is Conduent’s work for the cruise line mentioned above, for which the deployment of speech and sentiment analytics during the COVID-19 outbreak protected revenue and customer loyalty. Conduent reduced call refund volumes with IVR tuning and decreased the call backlog by 75%. As a result, Conduent became the sole analytics services provider for the cruise line.

Further, travel clients look for consumer insights to identify patterns and drive sales and marketing campaigns as well as product development, such as new destinations. To provide these insights, Conduent is now spending more effort on call transcriptions and after-call work to map upstream and downstream optimization opportunities; for example, around payments.

ESG and eco-travel next on the CX agenda

The topics of ESG and employee experience (EX) are becoming more prominent in Conduent’s discussions with travel brands. Sector clients add more KPIs for employee retention and satisfaction by benchmarking the performance of outsourced versus captive operations. This hyperfocus on quality follows the logic of better EX driving sales measures of success.

Sustainable travel is another emerging topic, but so far has little material impact on CX services. Consumers are cautious about spending more on eco-travel, with West European markets likely leading in this niche. Conduent executives see this space as highly correlated to macroeconomic trends but consider it capable of driving the creation of new CX models and white glove services.

A common theme in the upcoming NelsonHall CX Services in Retail & CPG report is the increasing need by sector clients to generate and operationalize insights from their customers. Technology has shifted the power to consumers who are less loyal to brands and change their buying behavior more frequently, creating micro-segments.

However, while having a wealth of data such as customer feedback, retailers are often prone to sitting on them without interpreting and driving their transformation programs. Comdata’s VOC analytics and customer feedback service, ConsumerLive, aims to assist companies in the end-to-end management of customer insights and has implemented it for several retail clients.

ConsumerLive: platform & service combined

Comdata launched the ConsumerLive platform in 2012 with a French luxury brand looking to streamline feedback surveys in the front office and improve re-engagement with customers. Today, it is a cloud-based PaaS tool comprising:

• Customer and employee feedback collection with alerts on aggregated performance
• Real-time reporting and dashboards, and KPI monitoring with mobile app access
• Engagement module to contact customers directly and prioritize targets
• Data analytics with supporting market research resources.

The company combines the platform with consulting services, where it develops the business model and ROI, maps the customer journey, mines the data on an ongoing basis, and designs, programs, and executes the surveys. It has developed a five-stage approach to implement VOC programs, covering:

• Winning executive support
• Structuring the governance of the program
• Consulting on change management
• Prioritizing target customer segments and moments of truth in the customer journey
• Deploying automation such as semantic analysis.

As a best practice, it focuses initially on quick wins to demonstrate the relevance of the VOC program, and then develops business cases for more transformational initiatives.   

ConsumerLive integrates with client CRMs such as Salesforce through an interconnector, building a single database across platforms to centralize customer feedback with other KPIs.

Customer insights is the DNA of CX in retail & CPG

ConsumerLive has ~20 implementations, spanning 50 countries in Europe, APAC, and Africa in 25 languages, and covers both traditional contact center VOC and wider customer journey and brand analysis. The latter is a focus area, particularly in retail, where clients look to monitor the performance of their physical network and e-commerce omnichannel.

Retail and CPG clients usually want to verify initially that the right customer profiles are interviewed and that a certain conversion rate for the campaign is achieved. Next, they are interested in matching KPIs such as customers’ overall satisfaction or intention to revisit against target sub-segments or geographic markets. Sector clients also filter the free-form comments by different topics such as stock availability or staff responsiveness to identify areas for improvement.

Another requirement is to compare customer satisfaction against market averages or across their network, and drill down to the salesperson or contact center agent level. The mobile app enables store managers to see in real-time the store’s performance and manage their staff or re-engage with customers directly through the platform.

For example, for a French retail chain specialized in home improvement with 300 outlets in the country and ~6.5k employees, Comdata developed customer satisfaction questionnaires, deployed monthly scorecards per store, made the survey results available 24/7, and analyzed ~40k verbatim customer responses in real-time. The client has the main KPIs displayed in its headquarters and stores. Since the program start in 2016, Comdata has conducted 1m surveys over email and SMS with 100k responses, and has contacted ~12k dissatisfied customers.

Improving data mining and expanding to social media

On the roadmap for ConsumerLive is a data mining module to correlate historical information such as purchases against customer feedback, and predict customer satisfaction results. It has already implemented the predictive functionality with one client and is now looking to industrialize it with a separate module.

Comdata also wants to expand to social media feedback, bringing online posts to the customer view. It currently works with Trustpilot to publish part of the user responses on social media and continue with more details in a private survey. While a number of ComdataLive clients have tested new survey channels such as SMS and QR codes, all still rely on email surveys which bring the highest conversion rate and the most reliable results.

Customer insights the foundation of retail transformation

In a data economy, retail and CPG clients have significant needs to map brand and CX attributes which actually drive loyalty and quantify customer behavior trends. These insights are the first step to supporting future investments in phygital, experiential retail, or new models such as subscription.

NelsonHall’s CX Services in Retail & CPG market analysis report and individual vendor profiles are available to clients of NelsonHall’s CX Services program.

For many years, the telecoms sector has been the dominant market for customer experience (CX) services providers. However, over the last few years, consolidation, flat performance, decreasing margins caused by market saturation, new digital models and competitors, and unfavorable regulations (e.g. Eurotariff) have eroded the significance of the telecoms sector for CX services providers. Indeed, a common boast among CX outsourcing executives is their success in diversifying away from the sector.  

And now, the $26bn acquisition agreement between T-Mobile and Sprint, announced last week, looks set to accentuate that trend. If approved, the deal will leave only three national wireless players in the U.S. and will put further pressure on their CX services providers.

Decreasing share & focus on telecoms

The communications industry remains the largest CX services sector at ~24% of the market in 2017 (NelsonHall estimate), but for most of the leading CX services providers it has been steadily decreasing in the last few years, both as a share of business and in absolute terms, as shown here:

Major telecoms brands such as AT&T, T-Mobile, Tele2, O2, Telefonica, BT, Three, and Telstra remain the largest clients for many CX services providers. However, in times of fluctuating volumes, this telecoms top-heavy client base has adversely impacted several providers in their core markets, though typically the overall growth in other sectors has offset the steady decline in communications. Additional factors such as the high level of self-service, where the sector has been a pioneer, simplification of offerings and product ranges, and demand for cost savings through offshoring, have further impacted the size and profitability of the segment.   

Digital opportunities in other, high-growth industries

The telecoms sector has been leading in the adoption of emerging digital channels such as messengers, in the implementation of contact center RPA, and the use of customer-facing automation through bots. However, partially due to the sector’s success in adopting these digital models internally, and partly due to smaller innovation investment funds, many of the most innovative and largest-scale outsourced CX implementations have been in other industries; for example:

• Videochat and messengers support in the e-retail, banking, and travel sectors
• Contact center and back-office automation in financial services, healthcare, and energy & utilities
• Big data analytics for revenue generation in BFSI, e-retail, and consumer electronics
• Remote diagnostics and self-healing for tech support in high-tech and automotive.

Major tech players such as Amazon, Alibaba, Apple, Facebook, Google, JD.com, and Netflix have now reached the scale of outsourced CX operations previously seen only in telecoms. The added benefit for these companies is their global nature, being able to offer multi-market prospects.  

But evolving telcos can be very attractive clients

Nevertheless, the constant evolution of telecoms’ business models, exemplified by Vimpelcom’s new strategy to reinvent itself as a global tech company, or the recent M&A surge to create telco-media behemoths such as the proposed AT&T Time Warner merger, unlock new opportunities. A great example of telco evolution has been AT&T’s purchase of DirecTV in 2015, which consolidated the outsourcing network but also provided new markets and service lines for AT&T core vendors.

The shift to 5G and IoT and the evolving telco’s end-user needs require proactive support, heavy use of automation and machine learning in the contact center, and always-on digital engagement. All these are current investment areas for CX services providers and, even if not straight away, telecoms will eventually reap their benefits.    

NelsonHall’s pending Global CXS Market Forecast 2018-2022 report and self-service forecasting facility provide industry breakdowns by service line, sector, geography, and vendor. For access, please contact NelsonHall Client Services Director Guy Saunders

I recently attended HGS’ forum on the trends and challenges in CX for the European Consumer Packaged Goods (FMCG) market. In the company’s West London center, clients and prospects including Colgate, Danone, L’Oréal, Nespresso, Nomad Foods, and Mars discussed the ways customer service can drive ecommerce and augment sales.

Digital as a force for disruption and opportunity in CPG CX

As with other sectors, the CPG market is disrupted by digital economy newcomers using direct-to-consumer models via ecommerce. Added to a stagnant mass market, decreasing customer loyalty, and hybrid shopping, this environment increases the importance of good customer experience. HGS’ Lauren Kindzierski, VP of Solutions and Capabilities, highlighted several approaches to enable digital customer experience, which the company has implemented across different verticals:

• Activate proactive chat to counteract abandoned shopping carts
• Roll out mobile chat to increase accessibility
• Launch self-service resources to minimize costs and improve the customer support journey
• Use SMS notifications for immediate gratification
• Build predictive analytical models on chat to segment customers.

A best practice for the company has been to ringfence the launch of a digital channel around a single brand to optimize the processes and technology.

CPG companies are also moving along this digital roadmap, with examples such as Nespresso’s own mobile app which allows users to buy coffee capsules, machines, and accessories on the go; or Nomad Foods, which began by fixing its knowledge base before trying self-service, and is currently trialing webchat in the Swedish market.

CPG’s distinctive challenges with digital CX

In addition to the typical riddles of evolving customer preferences and rapid technological life cycles, CPG manufacturers have industry-specific challenges with the adoption of digitally focused CX. For example, the competition for digital placement, including from vertically integrated brands, can limit product visibility and even narrow online shopping lists to selected brands. At the same time, CPG companies must balance their relationships with retailers and the opportunities for direct sales.

Another aspect is ownership of the online customer experience on retailers such as Amazon, where customer issues can stem from products and service. A solution is for companies to use a tool such as Bazaarvoice to analyze reviews. A different set of challenges come from shared product control within the organization, with marketing and product development departments often not tapping into the insights accumulated in the customer service functions, whether inhouse or outsourced. In HGS’ practice, a great approach is to have the customer care team visit the manufacturing plants and share feedback with the engineers firsthand.

Enabling digital channels for Danone and L’Oréal

In 2016, HGS began supporting L’Oréal from its London office, providing customer care for L’Oréal brands for the U.K. and Ireland markets over mail, phone, webchat, email, and social media, where it listens, moderates and responds to users. Over the last two years, the client has gradually shifted ~33% of all interactions to chat, which has higher CSAT compared to voice. By implementing a feedback loop for updates of the website with insights captured in the contact center, the client lowered the complaints rate from 51% to 39%. On social media such as Twitter, Facebook, Instagram, and YouTube, HGS supports 14 L’Oréal brands ranging from ones centered on a teenage demographic to the premium segment. Immediate benefits of the channel are extended hours of operation, and more proactive management, with efforts now focusing on social network influencers.

Another example of the use of digital channels for CPG companies is Danone. HGS has been supporting Danone since 2014 in the U.K. and Ireland, providing customer care, level 1 and 2 technical support, and social media services. Based out of the London center and also with work at home agents, the program supports expecting and new parents with early life nutrition consulting on a 24/7, 365 basis. The team of midwives, a healthcare practitioner, nutritionists, and counselors with experience in child care and first aid cover multiple channels, including phone, proactive and inbound chat, email, and WhatsApp. A separate quality management team ensures the program is compliant with WHO regulations and with the brand’s own requirements for data control and marketing communications management.

The decision to enable WhatsApp came after marketing research with mothers identified it as a relevant channel across all demographics. In July 2016, HGS launched the channel, and within the first hour registered the first five chats. The service is set up to allow users to add Danone’s contact number and initiate the chat sessions. Users can also push images and videos to the agent and, due to the asynchronous nature, can stop and continue the session over time. WhatsApp volumes have already exceeded those of live chat, with lower AHT compared to webchat.

Advancing on the digital journey

For L’Oréal in 2018, HGS is looking to continue to increase its social media teams, is already piloting Sprinklr as the new social media platform, and is building upon the self-service capabilities. Together with the client, HGS is identifying processes suitable for the implementation of chatbots. The company did a trial in 2017 with a hair dye product line, with a chat avatar advising users on color choice. It is also looking to expand live agent support into social messaging. A major question here is between launching with WhatsApp or Facebook Messenger, with the latter already used by the client in France.

For Danone, HGS has recently switched its platform for WhatsApp, with improved reporting and contact management, and is now planning to pilot video conferencing to act as a triage service for healthcare inquiries. Another pilot is underway to replace mailed paper vouchers with e-vouchers. 

In April 2017, TeleTech acquired healthcare BPS provider Connextions for $80m. The acquisition makes healthcare the second largest vertical for TeleTech, expected to reach ~21% of their annual revenue at ~$300m. I spoke with TeleTech recently to discuss the acquisition and their focus on the healthcare space.

TeleTech’s Healthcare Business at a Glance

TeleTech’s healthcare clients include payers, providers, pharma and medical supplies, medical devices and wellness brands. The company supports these clients from 20 domestic, nearshore, and offshore centers and with ~10k associates, including work-at-home. The size of the support population has grown eightfold over the last four years, adding ~2k roles in 2016 alone, including 900 licensed agents to support Medicaid and Medicare open enrollment.

For the top U.S. healthcare plans, TeleTech offers services in consulting, platform design and integration, revenue generation, and member care services. With its long-term client relationship in the space, TeleTech provides enrollment, sales support, member services, provider, and dental and vision services, and wellness outreach. For example, on the consulting side, TeleTech has helped a healthcare payer redesign their training curriculum to reduce the training time and improve the speed to proficiency, bringing cost savings and being utilized by TeleTech staff and the competing vendor agents.

The Connextions Value Proposition

Connextions was part of Optum since 2011 and offers member acquisition, retention, and customer care services to healthcare plans such as Medicare, Medicaid, individual and group, healthcare providers, and pharmacy benefits managers. The acquisition added new logos for TeleTech to reach ~20 core clients in the sector.

The company gains ~4k agents across the U.S. TeleTech expects the deal to add approximately $115m in revenue annually and to be EBITDA accretive in 2017, bringing the total customer management services business to ~$1.2bn by 2018 from the 2016 level of ~$924m (total company revenue was $1.275bn). Connextions also brings its proprietary healthcare CRM bConnected with embedded workflows, HIPAA compliance and security features, and capability to send the caller a microsite with plans comparison. It also extended the services portfolio with healthcare financial member services, back office and claims support, and telehealth.

U.S. Healthcare is the Most In Need of Customer Experience Improvement

The U.S. healthcare industry is behind the leading sectors in customer experience, with customers facing a limited and complicated enrollment process, lack of visibility of benefits, and disconnected support for member services. TeleTech leverages its experience in other industries to identify opportunities for improvement in healthcare. For example, for a medical and health network in L.A., it provides a single hub for information with a unified phone number for patient access to the hospital, clinics, and doctors, with ~40-50 agents offering concierge level services by locating providers based on proximity and past performance.

The open enrollment for Medicare and the private healthcare exchange, which are inherently seasonal, require quick ramp up of licensed agents in January to facilitate the shopping experience and convert leads until mid-February when the period ends. To license an agent for all 50 states costs upwards of $5k, in addition to training. TeleTech addresses this challenge by placing licensed agents to other programs in the off season, offering a work-at-home model, and working closely with schools of licensing agents. As a result, it is able to scale and bring back experienced agents who require less time to train, at a fraction of the cost of a new hire, and have on average a 25% improvement in their conversion rate year over year.

Another approach is employing new channels and technology in the telesales process. For example, for a healthcare client, TeleTech deployed a private chat channel for outbound call agents to offer customers the option to connect on a mobile device or desktop PC and continue the interaction on the digital channel with co-browsing functionality to draw, highlight on the screen, and send documents. On webchat, TeleTech has added historical information for past interactions with the customer, e.g. time spent on the website, pages viewed, and plans selected – thus giving context to the agent. With these chat capabilities, TeleTech experienced an NPS improvement of ~10-15%, better conversion rate than phone sales, and an increase in self-service adoption.

Remote Support Opportunities & Wellness Outreach

The requirements for healthcare providers and insurers are moving gradually to a more comprehensive view of the healthcare experience with strong use of analytics and digital technology. For example, six months ago, TeleTech started a program to provide video support for patients discharged to their homes to deliver a decrease in readmission rates and improvement in patient satisfaction with their healthcare experience. The patient gets a tablet with a video call button directly connecting with an agent who can see the patient in their home and on the CRM platform carry out an inventory of their medications, vital signs measurements, and check on the patient status and notify a care team if required. Beginning with a dozen agents, the company is looking to combine the current onshore and work-at-home model with offshore support.

TeleTech is also looking to wellness outreach as a strong opportunity to increase the value of healthcare and close some of the gaps for healthcare customers. For several clients, it delivers medication adherence, which includes data analysis for gaps in maintenance medication, and engaging the member with a phone call to understand the issue and offer alternatives. In turn, the medication adherence impacts the 40 metrics forming the healthcare plan star rating.

Under this changing perception of the market, and empowered by senior executive support, TeleTech is actively pursuing similar opportunities for a more holistic approach to healthcare services.

NelsonHall’s principal Customer Management Services analysts take a look at how the CMS market will shape up in 2017, with predictions for CMS delivery & transformation from Ivan Kotzev, and industry-specific predictions from Vicki Jenkins.

1. CMS Delivery & Transformation Predictions

For CMS, 2016 marked a substantial shift in the global market. Several high profile acquisitions reshuffled the global top 10 providers. Client requirements shifted towards higher value, comprehensive customer experience offerings. There was continuing growth in both offshore and onshore centers, and entry into new delivery markets. And the ongoing advance of analytics and automation, both technology and application, further changed the front-office.

In 2017, several of these trends will proceed at a greater pace, while external factors such as political risks have the potential to disrupt growth plans in specific delivery countries or client industries.

Consolidation: more of the same, bigger

In 2016, most of the M&A activity in CMS was strategic growth. Delivery scale still matters, and in 2017 vendors will continue to buy market share and contact center seats. A steady trend towards transformational customer experience is forcing clients to narrow their list of CMS suppliers, pressuring vendors to grow their footprint in the U.S. and key European markets and offer a global service in APAC and LATAM. Likely acquisition targets include U.S. and Indian providers.

Development and targeted acquisitions of digital marketing capabilities

In 2016, CMS vendors bought analytics, automation, and industry-specific capabilities, but some of the newest targets have and will be in the area of digital marketing. The main reason for this is the greater blending of sales and support in a predominantly digital customer experience. In turn, this causes buyers of contact center services to spread further among customer services, marketing, and sales departments. As a whole, clients are more ready to look at the end-to-end customer experience, which requires pure-play CMS providers to offer digital services beyond just support.

Automation of the desktop and more examples of virtual agents

The current investments in desktop automation and next-best actions for the customer-facing agents are gradually spilling over to more verticals, more services lines, and hybrid and fully automated virtual agents over text channels. By the end of 2017, the majority of the global top 10 CMS providers will have at least one fully automated virtual agent implementation.

Investment focus on machine learning and NLP resources

This level of automation is based on machine learning and NLP resources which vendors will add aggressively in 2017, either through in-house team development or partnerships in the AI start-up space. Machine learning algorithm developers, predictive modelers in R, and language analysts, all with industry experience, will be even more highly sought after than in the last year.

Self-service will mature to a separate revenue stream, while support over messengers will reach N. American and EMEA customers more decisively

In 2017, CMS vendors will continue to make more than three-quarters of their revenues from voice channels but, driven by client requirements, self-service will develop to a key channel in their offerings.

The new year will also finally deliver multiple outsourced support examples over Facebook Messenger, Viber, and WhatsApp for N. American and European customers.

Political risk will replace security concerns as the biggest external threat to the industry

The plans of the new U.S. administration for the healthcare sector, the Brexit terms, and the policies of the Prime Minister of India and President of the Philippines have the potential to disrupt entire delivery markets and industry sectors making multi-shoring, diversified vertical portfolios, and FX hedging vital.

Conservative growth

NelsonHall predicts 2017 year-on-year global CMS market growth to be ~4.5%, with factors such as increased adoption of digital services and stress on improved customer experience to drive demand for higher value services and revenue generation service lines, while automation and self-service will cannibalize part of the revenues.

2. CMS Industry-Specific Predictions

Retail Banking

• Use of RPA and cognitive technologies will increase, initially in support of agent assistance. Automation will be utilized in the front office, reducing cost and improving interaction turnaround times. RPA and cognitive also impact processing services, e.g. facilitating speed of origination for banking products
• Revenue generation will continue to increase in importance as a driver of CMS in the retail banking sector, driven by use of analytics and cognitive technologies, though cost reduction and the need for increased CSAT will continue to be key drivers for retail banking CMS
• Voice interaction will remain high due to the complexity of many retail banking interactions, though there will be a reduction over the next few years due to deflections to webchat. Email will continue to be used for sharing of documents. Social media and video chat will increase in importance.

Retail & CPG

• Revenue generation will continue to increase in importance as a driver of CMS in the retail and CPG sector. CMS will increasingly be used in support of proactive sales and enhanced two-way communication with customers
• Customer retention will continue to be a major focus for retail and CPG organizations, and loyalty program support needs will grow
• Webchat and social media will overtake email in channel usage, and website content, including video, will become a more integral part of service delivery
• Analytics usage will continue to grow, along with the need to better understand buying patterns, with AI beginning to be incorporated into service delivery.

High Tech

• Increasing CSAT, cost reduction, and process improvement will remain primary drivers of CMS in high tech, and revenue generation will increase in importance through paid technical support programs, to service out of warranty and out of warranty scope customers
• Customer retention will increase in importance as more high tech clients offer VIP and white glove customer care to customers, and the high tech sector continues to grow competitively. Cost reduction will increasingly be driven by ensuring that only complex calls are routed to highly skilled technical support agents, while less complex calls are routed to level 1 agents
• As high tech organizations increase adoption of video chat, the channels will shift and customer experience will be enhanced; customers will be able to show agents complex issues they are experiencing, and will be provided with faster service which is more likely to resolve issues in the first call. Video chat and online ‘how to’ videos will also reduce expensive truck rolls. Analytics and video chat will increase in use, to aid efforts to reduce product returns
• Risk-reward models will increase in use, particularly in sales/renewals of subscriptions.

Vicki Jenkins is NelsonHall’s lead analyst for industry-specific CMS markets, and Ivan Kotzev is the lead analyst on CMS delivery and transformation. To find out about NelsonHall’s extensive research plans for CMS in 2017, contact Guy Saunders.